Enhanced Monitoring of White Collar Employees: Should Employers Be Required to Disclose?
| Publication year | 1991 |
Technology enhances employers' ability to monitor the at-work activities of white collar employees.(fn1) As a consequence, employers increasingly utilize electronic devices to monitor telephone conversations, customer service operations, video display terminal (VDT) use, and other workplace activities in an attempt to objectively measure employee productivity, to pace work, and to combat crime.(fn2) This Comment examines the legal and economic effects of employers' enhanced monitoring of white collar employees and encourages the enactment of federal legislation requiring employers to disclose the use of enhanced monitoring to their employees.
In the typical white collar employment relationship, the employee is paid a wage or salary in exchange for services rendered. Compensation for roughly eighty-six percent of all employees is measured in units of time rather than output.(fn3) Although the employer can easily measure an employee's hours, the employer may find that measuring whether or not the employee is using that time efficiently is a far more difficult task. Consequently, because monitoring equipment is readily available to monitor employee efficiency, employers now use electronic monitoring to evaluate the performance of four to six million employees.(fn4)
The effect of enhanced monitoring on the employment relationship depends upon the manner in which the employer implements the monitoring and the aversion to being monitored by the individual employee. Because the employment relationship exists for the economic benefit of both the employer and the employee, legal and economic considerations are significant in the employer's decision to monitor as well as the employee's decision to remain in a monitored environment. This Comment presents a five part legal and economic analysis of enhanced monitoring of white collar employees. Section I defines the employment contract. Section II provides an overview of the legal issues raised by enhanced monitoring of white collar employees. Section III discusses the economics of enhanced monitoring. Section IV presents an analysis of the legal and economic effects of an employer's enhanced monitoring of white collar employees. Finally, Section V describes and evaluates proposed federal legislation that would require employers to disclose the use of enhanced monitoring to employees.
I. The Employment Contract-Employment At Will
Roughly sixty-five percent of all American employees are hired on an at will basis.(fn5) Employees with employment contracts specifying the duration and terms of employment, union members employed under collective bargaining agreements, and civil servants comprise the remainder of the American labor pool. The unique economic and legal complexities presented by employment relationships involving union and civil service employees are not within the scope of this Comment.(fn6) As a result, this Comment will not address collective bargaining and civil service employment relationships. Instead, this Comment will focus solely on enhanced monitoring of white collar employees hired on either an at will basis or under an individual employment contract specifying the terms and duration of employment.
The employment contract can be either written or oral. Breach of a contract specifying the terms and duration of employment provides the employee with a contract action against the employer for lost wages, fringe benefits, reliance damages, and compensatory damages.(fn7) In the employment context, however, contracts specifying the terms and duration of employment are uncommon (roughly three percent or less of the total workforce).(fn8) The parties typically do not define all the terms of employment because high transaction costs, high information costs, and unequal bargaining power discourage complete negotiations and specified terms.(fn9) As a result, the scope of the employer's right to monitor is usually not defined by the parties.
Rather than define specific terms of employment and duration, the parties define only such basic terms of employment as wages, hours, and benefits. Under the doctrine of employment at will, an employment contract indefinite as to duration is terminable at will by either the employer or the employee.(fn10) In effect, employment at will is a series of unilateral contracts. The contract is formed when the employer unilaterally offers wage or salary compensation, and the employee accepts by either beginning or continuing to perform the job offered.(fn11) In employment at will, despite the employee's expectations about the duration and nature of employment, the employee may be without a contract remedy when the employer alters the terms of the employment relationship. The employer's alteration of the terms of employment is simply an offer to the employee to accept a new unilateral employment contract. The employee may accept the contract and the new terms by continuing employment or reject the contract by resigning.
In the case of enhanced monitoring, strict application of the employment at will doctrine means that if the current employment contract does not limit the employer's right to utilize enhanced monitoring, then an employee has no basis for a breach of contract action when the employer implements such monitoring. Given that the white collar employment relationship is predominantly at will, are any legal restrictions placed on the employer's ability to utilize enhanced monitoring?
II. The Legal Boundaries of Enhanced Monitoring
Some type of employer monitoring of employees occurs in almost every employment relationship. Until recently, most white collar monitoring took the subjective form of random visual observation by the office supervisor. Historically, the supervisor observes the employees at work, and the employees are aware that they are being observed. In this context, courts have generally recognized that "the employer may exercise reasonable managerial rights of supervision even though this may not be specifically set forth in the parties' agreement."(fn12)Courts have upheld the employer's right to monitor employees for efficiency purposes, theft prevention, and compliance with employment regulations.(fn13)
As technology extended the employer's ability to monitor employee activities beyond mere supervision by a visibly present manager, the courts extended the employer's right to monitor. For example, still photographs, motion picture recordings, and closed circuit television monitoring of employees have been upheld as nothing more than an alternate method of supervision.(fn14) In
The employer's right to monitor is not without limits, however. When courts analyze employee monitoring, the propriety of monitoring depends on such factors as the nature of the monitoring, the employee's awareness of the monitoring, the classification of the monitored activity as business or private, and the egregiousness of the monitoring.(fn18) Constitutional issues are usually not a factor because Constitutional protection of employee privacy rights does not extend to private, non-governmental conduct.(fn19) Because Constitutional protections are limited and because statutory regulation of monitoring is currently limited to wiretap laws, employee challenges to employer monitoring are generally presented as contract or tort actions. Following a brief discussion of the wiretap laws, this Section will provide an overview of the legal aspects of enhanced monitoring, emphasizing the contract and tort actions available to an employee who believes that an employer is improperly utilizing enhanced monitoring.
Under the federal Omnibus Crime Control and Safe Streets Act of 1968 (Act), it is a crime to "intentionally intercept . . . any wire, oral, or electronic communication."(fn20) In 1986, Congress extended the Act to private communication systems that affect interstate commerce. In addition, "electronic communication" was added to the activities protected by the Act, and the definition of "wire communication" was broadened to include digitized voice transmissions and voice transmissions by radio and fiber optic cable.(fn21)
Although electronic mail, digitized transmissions, and video teleconferences are now protected under the Act, the protection is limited to the content of the communications.(fn22) Thus, monitoring the existence of communications is not prohibited. Furthermore, broad exceptions for extension telephones and "providers of communications services" were retained in the 1986 amendment.(fn23)
Under the extension telephone exception, an employer can, "in the ordinary course of business," use an extension telephone to monitor employee calls.(fn24) In
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